How to Manage Your Finances During Each Stage of Life

As you await your tax refund, you may as well review your financial health and make any necessary changes.

Save for college. The best time to begin saving for college is the day the baby comes home. There are college savings plans with tax benefits; look at state-sponsored 529 plans and educational savings accounts. Grandparents can also make contributions to college funds.

Midlife

Inheritance and windfalls. There may be money from a home sale, inheritance or insurance payment. This is a great chance to pay off high-interest debt such as credit cards or auto loans. It is also a good time to fully fund an emergency account -- six months of household income -- and put more money into a retirement account.

Teach children about finances. Children learn attitudes about money from their parents, so a good example should be set for kids on saving, spending wisely and charitable giving. Parents should take them shopping and show them how to compare prices, find good deals and walk away from a purchase because the price is more than you can pay. Open a bank account in their name and let them make deposits into their own account. Show them the interest they earn each month on their statement. Give them an allowance and let them make their own decisions about this money, paying for their own toys and games. This also gives them a chance to make mistakes with money. Help them understand that once money is spent, it is gone.

Preparing for retirement

Max out retirement savings. They may still be paying for your children's college education, but it is just as important for people to save all possible for retirement. Will retirement savings sustain someone retiring at 65 for at least 20 years? It is a good idea to save 10% to 20% of an annual income for retirement. Max out your employer retirement plans and Individual Retirement Accounts.

Pay off debt. It is easier to pay off credit card and other debt when there's income. The New York Federal Reserve says 2 million seniors in the United States who are age 60 and over still have their own student loan debt. If you have credit card debt on multiple cards, select the card with the highest interest rate and pay as much as you can above the minimum balance every month. You can even skip dinner at a restaurant and immediately log in to your account to apply that money to your credit card.

Have a plan to make savings last. Today, seniors have a longer life and their retirement savings has to last longer. This may be difficult if their investments are still recovering from the recent financial turmoil. Developing a plan and a budget may require the help of a financial adviser. The FDIC provides some good information on how to help your money last after your last paycheck.

Bill Hardekopf is chief executive of LowCards.com, which compares and rates more than 1,000 credit cards. He is the co-author of "The Credit Card Guidebook."